OPM estimates of e-gov savings may be unrealistic

The Office of Personnel Management may have overstated the savings that can be achieved through its electronic government projects, a General Accounting Office official said Tuesday.

Five e-government initiatives managed by OPM will generate about $2.7 billion in taxpayer savings "over [their] life," OPM Director Kay Coles James testified Tuesday before the House Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census. "We are going to save a lot of money and make life a lot easier for the federal workforce and the American people they serve," she said.

But Linda Koontz, director of information management at GAO, told lawmakers that OPM's savings estimates might not be realistic. "In many cases, estimated cost savings are only loosely based on measures that are inherently abstract, such as the average cost of performing a certain [task]," she said.

OPM manages five of 24 e-government initiatives designed to make government services more accessible to the public and reduce duplicative administrative procedures at federal agencies. OPM runs e-payroll, which reduces the number of federal agencies processing employee paychecks; e-clearance, which allows federal workers and contractors to submit security clearance applications or renewal forms online; recruitment one-stop, designed to simplify the job application process at federal agencies, e-training, which provides civil servants with online courses; and enterprise human resources integration, which will allow agencies to store personnel data electronically.

OPM expects its e-training initiative to save money by allowing federal employees to take online courses that cost an average of $10 to $15 per session, as opposed to traditional courses that may cost $150 or more per session. But the degree to which civil servants will substitute Web classes for regular courses is "unclear," Koontz said. OPM also failed to explain how savings generated in this manner could reach a projected total of $784 million by 2012, she added.

OPM is "more than willing" to explain the details of its estimates with GAO and interested lawmakers, said Norm Enger, OPM's director of e-government, in response to Koontz's criticism. He also said he doubted that OPM overstated savings from e-government.

The e-payroll project, expected to yield $1.1 billion of the total $2.7 billion in projected savings, may actually free up more money, Enger said. The $1.1 billion is a conservative estimate, he explained, because it assumes that only 14 agencies will participate in the payroll consolidation. To date, 25 agencies have signed on, though not all will have switched to the consolidated system by Sept. 30, 2004, the target date set by OPM, Enger said.

In addition to producing fuzzy savings estimates, OPM e-government managers have bowed to pressure from the Office of Management and Budget to "achieve results quickly," even if that means taking some shortcuts along the way, Koontz testified. For instance, OPM moved ahead with a plan to revamp its USAJOBS Web site, despite controversy over a decision to award a contract for the site upgrade to Monster.com.

"While it is important to adhere to agreed upon schedules, it is also important to follow established contracting procedures, which are intended to ensure fair competition," Koontz said. "A rapidly chosen vendor may not represent the best value for the government's investment."

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